Telefonica, S.A.
Telefónica, S.A., together with its subsidiaries, provides telecommunications services in Spain, Brazil, Germany, and the United Kingdom. The company offers digital services for residential customers, such as entertainment, home connectivity and security; and advanced solutions for businesses and p…
Telefónica, S.A., together with its subsidiaries, provides telecommunications services in Spain, Brazil, Germany, and the United Kingdom. The company offers digital services for residential customers, such as entertainment, home connectivity and security; and advanced solutions for businesses and public administrations, including cloud, cybersecurity, IoT, artificial intelligence, and professional services. It also provides wholesale services to other operators; fixed and wireless telephony services. It is also involved in the wholesale commercialization of a fiber-to-the-home network; and manages borrowing activities. In addition, the company offers ecosystem services, such as devices, health, insurance, video content, solar energy, alarm systems, advertising, financial services and education, etc.; traffic, connection fees, regular network usage fees, interconnection, network and equipment leasing, and handset sales; and other digital services comprising Pay TV and value-added services. Telefónica, S.A. was incorporated in 1924 and is based in Madrid, Spain.Priced within the modelled range
5-year outlook: Not shown because confidence is low: EV/EBITDA (12x) disagrees strongly.
Other models: EUR 5.50–12.03 (median 8.76). The recommended value is in line with them.
Why: Free cash flow is positive and in line with earnings, and the dividend is small, so a cash-flow DCF fits best.
Details and the full model are below.
Market price within modeled range
Free-cash-flow DCF using Fiscal year 2025 reported free cash flow, with cash, debt, and shares from the latest report. Base assumptions are 2% growth, 2.9% terminal growth, and 10.4% discount. Low/high cases vary growth by 2 and terminal growth/discount by 1 percentage point; this illustrative range is not a statistical confidence interval or investment advice.
Assumptions: growth 2%, discount rate 10.40%, terminal growth 2.90% (sector defaults). See a worked example.
Blended growth assumption: 2.0% (sector default 7.0%, own revenue history -4.2%, analyst revenue consensus 2.1%).
Analyst consensus expects revenue growth of 2.1% a year; the growth assumption used is 2.0%.
Adjust assumptions
Why this model: Free cash flow is positive and in line with earnings, and the dividend is small, so a cash-flow DCF fits best.
Compare models- Recommended: Free-cash-flow DCF — EUR 5.08 (+52.0%)
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EPS-based Gordon proxy
— not applicable
Not used: Cannot be computed: net income is zero or negative.
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DCF (trailing free cash flow)
— EUR 5.08 (+52.0%)
Not used: Not chosen: Free-cash-flow DCF ranks ahead of it for this company.
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FCFF (steady state)
— EUR 5.50 (+64.8%)
Not used: Assumes only the long-run terminal growth rate from today, so it ignores the near-term growth expected.
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EV/EBITDA (12x)
— EUR 12.03 (+260.0%)
Not used: Used only when free cash flow is far below earnings even after averaging three years; a fixed 12x multiple also ignores sector differences.
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Fade DCF (10-year growth fade)
— EUR 5.09 (+52.5%)
Not used: An alternative growth path (fading over 10 years) shown for comparison; the automatic choice does not use it.
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EV/Sales (Rule of 40)
— EUR 26.41 (+690.8%)
Not used: Used only when cash-flow models land far below the price; here they do not.
| Bear EUR 2.36 | -41.6% |
| Base EUR 5.08 | 34.2% |
| Bull EUR 9.84 | 66.1% |
Margin = (value − price) / value, so it is measured against the value and reads lower than the upside to value, which is measured against the price. Positive means the price is below that case.
At EUR 3.34 the market implies about this annual free-cash-flow growth for 5 years (terminal 2.9%, discount 10.4%).
Compare: the market implies -2.0% a year, this model assumes 2.0%. The model is more optimistic than the price, which is why it reads as undervalued.
Sensitivity: base value per share
How the Free-cash-flow DCF value changes with growth (rows) and discount rate (columns). Green cells are above the current price.
These are assumption-based scenarios, not a confidence interval. Scroll horizontally to see all discount rates.
| Growth \ Discount | 8.4% | 9.4% | 10.4% | 11.4% | 12.4% |
|---|---|---|---|---|---|
| -2.0% | 6.59 | 4.72 | 3.35 | 2.30 | 1.47 |
| 0.0% | 7.76 | 5.69 | 4.18 | 3.02 | 2.11 |
| 2.0% | 9.02 | 6.75 | 5.08 | 3.80 | 2.79 |
| 4.0% | 10.38 | 7.88 | 6.04 | 4.64 | 3.53 |
| 6.0% | 11.85 | 9.10 | 7.08 | 5.54 | 4.32 |
Track record: see the methodology page for how this model has performed historically, including its limits. Treat it as a screen, not a forecast.
Price history and fair value
No chartable saved daily price history is available for this range. The chart uses stored EODHD prices only and will appear after history is saved.
More detail: quality, peers, price history, dividends and financials
Quality score: 48 / 100
Five equal checks on reported history: profitability, cash generation, revenue growth, balance sheet and margins. It describes business quality, not whether the price is attractive.
| Profitability | 1 of 5 years profitable | 4 / 20 |
| Cash generation | free cash flow positive in 5 of 5 years | 20 / 20 |
| Growth | revenue -3.3% a year | 4 / 20 |
| Balance sheet | net debt 4.9x EBITDA | 0 / 20 |
| Margins | EBITDA margin 25% | 20 / 20 |
Peers in Communication Services
Same-sector companies with a valuation, most undervalued first. Compare the margin of safety, yield and quality score side by side.
| Company | Price | Margin of safety | P/E | P/B | Yield | Quality |
|---|---|---|---|---|---|---|
| TEF.MC (this company) | EUR 3.34 | 34.2% | – | – | 9.0% | 59 |
| VOD.L Vodafone Group Public Limited Company | GBP 1.14 | 43.5% | – | 0.6 | 3.3% | 66 |
| PUB.PA Publicis Groupe S.A. | EUR 102.40 | 42.1% | 15.7 | 2.5 | 3.5% | 90 |
| CMCSA Comcast | USD 24.23 | 40.8% | 7.6 | 0.9 | 5.6% | 82 |
| INF.L Informa plc | GBP 8.40 | 23.0% | – | 1.9 | 2.4% | 66 |
| SONY Sony Group Corporation | USD 26.66 | 22.1% | – | – | – | 82 |
| EMBRAC-B.ST Embracer Group AB | SEK 95.20 | 18.7% | – | 1.0 | – | 56 |
| GOOG Alphabet Inc. (Class C) | USD 286.13 | 10.4% | 15.0 | 5.2 | 0.3% | 100 |
| GOOGL Alphabet Inc. (Class A) | USD 287.27 | 10.0% | 15.1 | 5.2 | 0.3% | 100 |
| Peer median | 15.0 | 1.9 | ||||
Dividends
Paid in the last 12 months: EUR 0.30 per share · yield 8.98% at the current price.
| Year | Dividends per share |
|---|---|
| 2026 (so far) | 0.150 |
| 2025 | 0.300 |
| 2024 | 0.300 |
| 2023 | 0.300 |
| 2022 | 0.298 |
| 2021 | 0.346 |
Annual financial statement
Saved annual report · Fiscal year 2025 · Yahoo Finance annual statements · period ended 31 Dec 2025
| Revenue | EUR 35,120,000,000 |
|---|---|
| EBITDA | EUR 8,408,000,000 |
| EBIT | EUR 1,044,000,000 |
| Net income | EUR -4,318,000,000 |
| Free cash flow | EUR 4,667,000,000 |
| Capital expenditures | EUR -5,055,000,000 |
| Debt | EUR 39,653,000,000 |
| Cash | EUR 6,726,000,000 |
| Working capital | EUR -2,832,000,000 |
| Shares outstanding | 5,652,115,000 |
| Reported dividends per share | EUR 0.3000 |